In the aftermath of a global pandemic and with the context of shifting geopolitical landscapes nations struggle with what looks like slowing trade. In this article we examine the current state of global trade, weighing the optimistic strides made against a backdrop of challenges.

Progress in August

First, the good news – it looks like significant progress in global trade growth was made in August, as several factors appear to support broader international trade – according to the WTO’s August 2023 trade report.

For example, Ukraine has initiated a significant move by opening a “humanitarian corridor” in the Black Sea for cargo ships. It’s a marked change when considering the recent collapse of the Black Sea Grain Initiative: Russia’s exit from the grain initiative and its subsequent blockade on Ukraine.

On a broader trade front, the WTO stated in the same report that services trade is witnessing what looks like more robust growth compared to merchandise trade. This difference is particularly accentuated thanks to export restrictions on key goods, including food and fertilizers.

In fact since 2020, there has been a significant increase in export restrictions. For instance, 63 such restrictions are in place for food, feed, and fertilizers.

Last year, the services trade saw a remarkable 15% boost, decisively outperforming the 2.7% growth in merchandise trade.

When combined, the total trade experienced a 13% surge, accumulating to an impressive $31 trillion.

Challenges in many corners

Diving deeper into global trade intricacies, we see a few pinch points – including a reminder of how physical pinch points such as the Suez and the Panama Canal can restrict global trade.

A severe drought at the Panama Canal is causing significant disruptions to global trade. In practice cargo ships have waited for extended periods, sometimes several weeks, to traverse the canal – which delayed cargo significantly, and led to a build-up of vessels.

The Panama Canal Authority (ACP) has had to limit the number of vessels using the canal and impose restrictions on ships’ depth, limiting the cargo they can carry, due to water scarcity. The ongoing drought situation is described as presenting “unprecedented challenges”.

The canal, which connects almost 2,000 ports across 170 countries, is pivotal for international trade, with major traffic from across the globe but in particular countries such as the United States, China, and Japan.

The drought’s impact on the canal emphasizes the increasingly disruptive consequences of the climate crisis on global supply chains.

Trade volume under policy pressure

China, a major player in the world’s economic scenario, registered a sharp decline in both exports, by 14.5%, and imports, by 12.4%, in July. One event that may have contributed is the US decision to curtail its investments in some pivotal Chinese tech sectors.

Also in the East, Japan and Qatar are keenly focused on strengthening their trade ties, but there’s a cloud of uncertainty between Japan and the US due to disagreements over whaling practices.

The changing global climate has also been exerting pressure on trade. Rising temperatures have escalated food prices, with soybeans, olive oil, and rice facing severe shortages.

The emphasis on climate-aligned foreign direct investment (FDI) is now seen arguably at the core of sustainable growth of developing nations.

A noteworthy development from the West is the recent downgrading of the US’s long-term credit rating, which poses intriguing questions about the behemoth economy’s future borrowing and investment capabilities.

IMF comment underlines global concerns

In the aftermath of a global pandemic, the world finds itself grappling with unprecedented challenges. Recent research from the Kansas City Federal Reserve paints a challenging picture of the post-pandemic global economy, highlighting issues like soaring government debt, geopolitical tensions, and an unsettling trajectory for technological innovation.

With the backdrop of geopolitical disruptions like the Russian invasion of Ukraine and escalating U.S.-China tensions, global trade appears to stand at a tough crossroads.

Pierre-Olivier Gourinchas, the International Monetary Fund’s chief economist, underscores the fragility of the current state, noting that countries are drained after battling the pandemic, and that policy-driven forces and decoupling between China and the West add further strain.

The looming danger is a possible stagnation where parts of the world fail to progress, leading to demographic and migration pressures. Economists, including Gourinchas, believe that global growth might stagnate around 3%, a disappointing rate compared to the past where China’s rapid development drove figures above 4%.

Existing trends amplified by COVID-19

The impact of the pandemic amplified certain pre-existing trends. A paper by Serkan Arslanalp of the IMF and Barry Eichengreen from the University of California, Berkeley, reveals a troubling statistic: the ratio of public debt to global economic output surged to 60%.

This was largely driven by pandemic spending by governments. Such unsustainable levels of debt threaten to divert vital resources away from developing nations that have burgeoning populations but lack capital.

Recent geopolitical events, notably the Russian aggression against Ukraine, have also fragmented the longstanding belief that trade fosters lasting international partnerships.

COVID-19 had, of course, a huge impact on global trade flows and arguably became a movement where many participants in global trade decided that near-shoring is also the equivalent of de-risking.

It led to a pattern of nearshoring but World Trade Organization Director-General Ngozi Okonjo-Iweala cautions against the current trend of reordering global production patterns. While diversifying trade might seem appealing, it’s essential to extend opportunities to those nations historically sidelined in the global trade arena.

What does global growth look like?

Global economic growth is a natural driver of trade growth. From an economic standpoint, recent economic projections from the IMF shows global growth decelerating, with projections declining from 3.5% in 2022 to 3.0% for 2023 and 2024.

Although inflation in developed economies shows signs of slowing, trade volumes are down. Manufacturing sectors worldwide are experiencing a slowdown, and while services are expanding, there’s noticeable deceleration.

The ripple effects of the pandemic also extend to the future of work, affecting urban economies. Demand for office spaces in major cities like New York, London, and San Francisco is dwindling, with average office attendance dropping significantly.

In general it could be suggested that global growth is somewhat anemic – and there are also signs that China may not offer much support in the near future.

Debt may continue to weigh on trade

Despite the myriad challenges facing global trade, and an ongoing recession threat, it’s worth considering the resilience shown by key economies. Growth in certain sectors, like the services trade, offer a beacon of hope.

The commitment of nations to navigate these complex issues, combined with the need to diversify and include historically sidelined nations, has the potential to reshape and strengthen global trade patterns for a more inclusive and prosperous future.

For organizations dependent on global trade it therefore depends on the ability to harness opportunities – which, though under pressure, will still be out there to harness.

The post Global trade growth is slowing in 2023 as expected – here are the challenges and opportunities appeared first on Trade Ready.

The Jobs and Growth Fund (JGF) is a new $700-million federal government funding program that aims to support Canadian economies with long-term growth and jobs creation following setbacks from the global COVID-19 pandemic. Also, JGF includes up to $70 million for small businesses established after January 2020.

“By investing in our job creators and the organizations that support them, the Jobs and Growth Fund will help to create quality jobs, pursue inclusive and clean growth opportunities, and empower businesses and communities from coast to coast to coast.”
– Mélanie Joly, Canada’s Minister of Economic Development and Official Languages.

These businesses must meet the program’s eligibility criteria. Highlighting this is crucial, as most grant and loan programs need businesses to be well established, meaning there is less funding for startups and entrepreneurs.

JGF financial support is being administered by Canada’s regional development agencies, including FedDev Ontario for Southern Ontario applicants and Western Economic Diversification Canada (WD) for applicants in Western Canada.

Funding snapshot: Jobs and Growth Fund (JGF) for Ontario and Western Canada

Applications are now being accepted on a continuous intake basis until March 31, 2024, or until funding is fully allocated. The Jobs and Growth Fund (JGF)  supports projects that stimulate job creation and long-term growth for Canadian organizations through a diverse focus on rebuilding the Canadian economy following the trials and tribulations of the COVID-19 pandemic.

Funding amount

• Eligible businesses may receive interest-free repayable contributions for up to 50% of eligible costs
• Eligible not-for-profit organizations could receive non-repayable contributions for up to 90% of eligible costs
• Eligible Indigenous organizations may receive contributions for up to 100% of eligible project costs
• Project contribution amounts do not normally exceed $10 million

Applicant eligibility

• SME Businesses, including co-operatives
• Not-for-profit organizations and community economic development partners
• Indigenous organizations

Eligible projects

To be eligible for the Jobs and Growth Fund, projects must:

Strengthen the capacity in sectors critical to Canada’s recovery and growth:

• Support scale-up and market expansion activities
• Develop emerging areas of global competitive advantage
• Support supply chain adaptation and diversification opportunities in critical sectors such as food production, medical supplies, and biomanufacturing

Foster an inclusive recovery:

• Support businesses owned or majority-led by underrepresented groups
• Increase the participation of underrepresented groups in the economy by supporting not-for-profit organizations that provide funding, business services, training, etc. for a more equitable workforce

Preserve Canada’s competitiveness and future-proof SMEs through digital adoption:

• Support the development or adoption of digital and technological solutions (i.e. Industry 4.0) to increase and promote business productivity
• Invest in technologies that help scale businesses, enhance their capabilities, and increase resilience

Support the transition to a green economy:

• Support the development and adoption of clean technology
• Help communities and businesses plan and drive clean, sustainable economic growth
• Partner with organizations to catalyze the development of green regional clusters
• Work with organizations supporting businesses to transition to a green economy

Program timeline:

• Applications will be accepted on a continuous basis until all funding is allocated.
• Certain costs may be eligible on a retroactive basis up to 12 months before the receipt of the project application, but no earlier than April 19, 2021.
• All projects must be completed prior to March 31, 2024.

If your Ontario or Western Canada organization wants government funding through the Jobs and Growth Fund (JGF), please reach out to the Mentor Works team to help streamline the application and grant writing process.

Government grants and loans for COVID-19 recovery

Although many Canadian provinces are no longer in strict COVID-19 lockdowns, and national vaccination rates are higher than any other country, many businesses across Canada are still feeling the negative impacts of the virus.

In addition to the new Jobs and Growth Fund (JGF), there are other government programs dedicated to providing COVID-19 relief and recovery funding. Stay posted on the Mentor Works COVID-19 Funding Programs Page for resources, news, programs, and COVID-19.

The post How the Jobs and Growth Fund supports Canada’s economy through COVID-19 appeared first on Trade Ready.

In a recent press release, The WTO (World Trade Organization) predicted that world trade was set for a strong but “uneven recovery” in the aftermath of COVID-19, with the volume of global merchandise trade expected to increase by 8.0% in 2021 after having dropped 5.3% in 2020.

They were also cautious to note: “The relatively positive short-term outlook for global trade is marred by regional disparities, continued weakness in services trade, and lagging vaccination timetables, particularly in poor countries.”

Considering the simultaneous feeling of optimism and uncertainty in the current economic climate, FITT recently hosted an online panel discussion as part of our Challenge and Change series of events to discuss the next phase of business as vaccinations begin to roll out across the world.

For some, there is a light at the end of the tunnel, while others feel they are still very much in the woods, so we turned to a panel of international business experts to draw up useful insights and strategies that businesses could use to move forward in the current climate.

The event, From Reactivity to Adaptability—Advice and Resources for Businesses on the Rebound, explored

• How various industries were faring
• Shipping and supply chain trends
• Risk mitigation strategy for the coming months
• Available businesses support resources, networks, and organizations
• And much, much more.

See what some of the speakers had to say below:

Watch the full event including a LIVE Q&A with the panel below

SME and industry insights, the new normal and innovation in tech

Bernadette Fernandes – Founder & CEO, The Varanda Network

Bernadette’s global business career began in 1986 and has spanned several sectors. She has spent the last 10 years consulting her Varanda Network clients all over the world. She is passionate about helping SMEs develop their export readiness and connect them to business opportunities in markets worldwide.

As circumstances are changing, and many are looking forward to getting back to normal, what type of approach do you think a business can take for preparing for a more normalized market?

Bernadette:

With the exception of travel…we now see a lot of things that we want to do differently or less of, like not having to go into a workplace and, instead, having a more balanced life.

I know some technology companies that are actually now more successful because they are able to offer alternatives to travel. I look at Kognitive Spark, a software company based in New Brunswick where I live, and they’ve seen an increase in clients, applications, target market and revenue because they offer an augmented reality solution with the Microsoft hololens that provides things like maintenance support remotely to onsite staff instead of sending a technician from wherever that expertise happens to be.

Having said that, I do believe that there are many businesses that want to establish some semblance of normal, even if it’s not the normal we were used to. So there are things that businesses are doing or can do to prepare themselves for this new normal—most of which seems to be around digital transformation. To establish or grow an online presence, pivoting and transformation seem to be the things within our control these days, so instead of sending salespeople to tradeshows or to client premises, we’re now relying on e-commerce or social media sales.

Risk mitigation strategy and how to best prepare your business for market changes

Enrique Sobalvarro: CITP, Director-at-Large, The GoldMind Project

Enrique is an international trade professional, connector, entrepreneur, strategist, and expert advisor with over 20 years of experience. He is now working as the Director-at-Large for The GoldMind Project. He is also a member of the Advisory Board of the Small Business Initiative at Calgary Catholic Immigration Society and, recently, contributed to Calgary’s post-pandemic recovery as a Business Mentor the Bounceback YYC (a Mount Royal University and the City of Calgary initiative) helping hundreds of entrepreneurs to launch their businesses.

Rahim Mohtaram – Ph.D., Professor at Saskatchewan Polytechnic

Rahim has been working in global supply chains for 15 years and has negotiated and executed more than 155 international contracts in sales, purchasing, agencies and distributors in 25 countries. He is also a CIFFA certified instructor and provides consultation on cost reduction strategies.

The last time we were together on a panel, we talked about smart cost-saving logistics strategies that businesses were employing during the pandemic. Have you seen these strategies change at all in 2021?

Smart finance options to carry your business through all conditions, plus the importance of having a documented business plan.

Amesika Baeta, CITP – Senior Account Manager, Export Development Canada (EDC)

As a senior account manager at Export Development Canada, Amesika works with companies of all sizes, of all industries, helping them take their business abroad providing them with trade finance, knowledge and risk mitigation strategies. She has worked in international trade for over 10 years.

Amesika Baeta:

Finances are always top of mind for a lot of SMEs. Though many are looking forward to a normal economy, the truth is that we’re not out of the woods yet. What are some insights you can share with those looking to tread this uneven scenario?

For many, we’re still trying to find ways to access working capital to support their needs. Over the last year, the support for SMEs has quickly changed to adapt to the needs that we see that they need. The reality is that this current economic climate has come, and EDC is one of those agencies where we had to really pivot to figure out how we serve our exporters. Now, in March of last year, the Government of Canada expanded EDC’s mandate to specifically help Canadian companies take on the risk of doing international business. But in times like this, the Canadian government said, no, we need to stretch beyond your mandate to help non-exporting Canadian companies face the financial challenges that they’re experiencing due to the pandemic. As a result, we had to make the necessary changes to adapt and extend some of our focus and our solutions to support needs like this, literally overnight.

We went into problem-solving mode to figure out how does EDC fit into this and what can we do? What are the mechanisms that we have to change to really grow and meet the demands of Canadian companies? So, our goal was to minimize the impact of this pandemic on all businesses—all Canadian businesses. One of the things that we did is create a business credit accessibility program, or what’s most know as the BCAP guarantee program, which is a stepping stone off of another financial guarantee program that we have at EDC that is traditionally for commercial bank clients. So this guarantee program was created in partnership between EDC and Canadian financial institutions to help businesses of all sizes and sectors and all across Canada to address the financial impacts that COVID-19 was having on companies. So, qualified applicants could be quickly approved to help meet their cash flow needs through their bank or credit unions to help manage their day-to-day expenses.

This guarantee is being served through your financial institutions and it is specifically done in new operating lines or term loans, if that’s what your bank has determined in order to really help sustain your operations. So, to pay rent, to pay employees salaries, to, you know, keep the lights on, and to keep operations moving. That program is there to try and help bring the cash into the economy to help companies survive and really, it’s been a program that has been very successful for companies of all sizes and shapes. It’s still available today, so, if you’re not speaking to your bank about it, I would highly recommend going and speaking to them to see whether you qualify.

I must preface that EDC’s program has set parameters and how each bank or credit union applies those parameters differs. So, again, I highly recommend that you and speak to your financial institution and see whether the BCAP guarantee program is a good fit for your cash flow needs. Now, there’s been other things EDC has done. We’ve taken on more credit appetites when it comes to insurance. We’ve made special accommodations to consider if companies had to pivot their business models to sell PPE or start manufacturing PPE and other types of things during the pandemic. So, we’ve made a lot of adjustments to our own regular programs that we provide in order to try to help companies through this pandemic. I welcome people to come to EDC either through the website or online or contact me directly, and I can put you in touch with the appropriate colleagues in the organization to talk through any of those programs to see whether they’re the right fit for your needs right now.

There’s a number of other programs that have been created through our sister crown corporation. Business Development Bank of Canada, there’s provincial programs, federal programs, some municipal programs have all been done to try and help companies survive this pandemic. We’re not out of it yet, so don’t be too proud to go out and ask for what help is out there because that’s the only way that we’re going survive. I also really recommend that you don’t make assumptions as to what you think you are eligible for. Just go and ask an expert to see whether your business could be eligible for these programs. The skilled team at EDC can also answer any kind of trade-related questions that you might have.

If you’re interested in specific COVID-related programs, there are a number of different resources that you can leverage. Virtual tradeshows that you can attend or industry reports or the Canada Export program—that’s run through the Trade Commissioner Service.

In terms of things that I’ve been seeing in my role as an account manager specifically in the GTA region, I’ve seen how important it is for companies to really have a good sense of where they are financially. So, as Enrique mentioned, the importance of having a business plan that addresses what the current needs are—not from when you wrote it, five, 10, or 20 years ago. You may have revamped it for today, and there has never been a time where it has been so needed for companies to make sure they take the time to stop and re-evaluate and readjust themselves as well. And, when it comes to working capital, that is extremely important because your bank is going to be asking for that organization. Any financial institution is asking to see a business plan. One, they want to understand how did you survive the pandemic, what do you do when you had a bad year and because you lost a few clients, that’s ok, but what did you do to pivot? What did you do to counteract that dip in sales? Are things starting to turn around in 2021? Have you had to start selling a different product? Did you move your product online?

We want to know that story as to what your business had to go through, so it’s important that you are building comprehensive financial statements, that you’re keeping interim statements up-to-date and your sales projections. The more organized, the more prepared you are to answer these questions, we’ll only ever be more in your favour and allow you to have more productive conversations with your financial institution.

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“We are launching the Highly Affected Sectors Credit Availability Program to help those businesses hit hardest by the pandemic with low-interest, government-backed loans. By investing in Canada’s businesses, as well as workers and their families, we are investing in our shared recovery and a better future for all.”–The Honourable Mary Ng, Minister of Small Business, Export Promotion and International Trade in a Canada.ca News Release, Jan 26, 2021

HASCAP government funding supports all businesses that have experienced a substantial decrease in revenues by at least 50% because of COVID-19.

Qualified small to medium-sized Canadian businesses can receive up to $25,000 to $1 million in HASCAP support loans, and larger organizations with multiple locations, such as restaurants or hotels, can receive up to $6.25 million in government funding.

About HASCAP loans for COVID-19 business support

Administered through the Business Development Bank of Canada (BDC), the Highly Affected Sectors Credit Availability Program (HASCAP) aims to offer financial assistance to Canadian businesses that have been hit hard by the impacts of the COVID-19 pandemic.

Applicant eligibility:

Based on the following eligibility criteria established by the Government of Canada, a primary financial institution will determine whether a business qualifies for HASCAP loans:

• An eligible business must be based in Canada, and have been financially stable and viable prior to the current economic situation.
• An eligible business must have received payments either from the Canada Emergency Wage Subsidy (CEWS) or the Canada Emergency Rent Subsidy (CERS) by having demonstrated a minimum 50% revenue decline for at least three months (not necessarily consecutive) within an eight-month period prior to the date of the HASCAP Guarantee application.
• If an eligible business does not qualify for CEWS and CERS, but otherwise meets all HASCAP eligibility criteria, they must provide financial statements that reflect at least three months where their revenue decreased by a minimum of 50% within the eight-month period prior to the date of the HASCAP Guarantee application.

Amount:

An eligible business can apply for a HASCAP loan for each legal entity they own, up to a maximum combined amount of $6.25 million (all legal entities combined).

• Up to $25,000 to $1 million in loans for a single, small to medium-sized business.
• Up to $6.25 million in loans for large organizations with multiple business locations.

Eligible expenses:

HASCAP loans cannot be used to pay or refinance existing debts; the loan will be used exclusively to continue or resume operations by relief of payments relating to:

• Rent payments.
• Employee payroll.
• Any additional costs deemed eligible to sustain business operations.

Thinking about taking your business online during COVID-19 closures? The FITTskills Online E-Commerce Workshop gives you the training you need to get more customers from around the world by offering your products online.

Timeline:

• The HASCAP Guarantee is available until June 30, 2021.
• From a 4% interest rate and a repayment term of up to 10 years.
• Up to a 12-month postponement of principal payments at the start of the loan.

Other COVID-19 government funding support options

There have been dozens of government programs that have launched in support of the relief and recovery of Canadian businesses impacted by COVID-19 restrictions, lockdowns and overall pandemic fatigue.

To learn more about these government funding options offered to assist Canadian businesses during the COVID-19 pandemic, please visit the Mentor Works COVID-19 Funding Page.

Mentor Works is a business support organization specializing in Canadian government funding. The Ontario-based business has helped hundreds of businesses build and execute their funding strategy through a mix of federal and provincial government grants, loans, and tax credits. Mentor Works offers free online resources, funding webinars, and news via their website at www.mentorworks.ca.

The post Highly Affected Sectors Credit Availability Program: COVID-19 support loans appeared first on Trade Ready.

This news bodes well for those looking toward recovery in the new year, but the road ahead requires much patience, financial strategy, and government support too. For struggling businesses, especially SMEs, the Regional Relief and Recovery Fund is a viable option that can help them financially stay afloat until the economy is back in full swing.

The Fall Economic Statement (FES) and Regional Relief and Recovery Fund (RRRF)

On November 30, 2020, the Government of Canada released the 2020 Fall Economic Statement (FES) titled Supporting Canadians and Fighting COVID-19. Focusing primarily on the support from the Regional Relief and Recovery Fund (RRRF), the FES report highlights details about RRRF statistics, projections, and strategy plans as they relate to COVID-19 support for Canadian health, safety, business, and jobs.

Canada’s Fall Economic Statement (FES) highlights that, since its launch in May 2020, the Regional Relief and Recovery Fund (RRRF) has supported over 15,000 businesses in Canada, including more than 5,000 women-owned organizations and over 8,500 rural companies, saving around 100,000 jobs during the ongoing global COVID-19 pandemic.

What is the Regional Relief and Recovery Fund (RRRF)?

The Regional Relief and Recovery Fund (RRRF) provides repayable interest-free loans that support the fixed operating costs of Canadian businesses that cannot meet the eligibility criteria to receive funding through other federal and provincial COVID-19 support programs.

The RRRF was recently extended and expanded in southern Ontario and businesses may now receive loans for retroactive costs from March 15, 2020 until March 31, 2021 for up to a maximum of $1 million, and select not-for-profit organizations are now eligible for funding.

“Our government will always be there to support Canadians to stabilize the economy and help businesses grow. We’re working with you to support good, local jobs and help Western Canada’s economy come back strong.”—Mélanie Joly, Minister of Economic Development and Official Languages

The expense deadline of March 31, 2021, for RRRF funding support is fast approaching, so those who are interested need to apply soon to receive interest-free loans to support their economic plans during the pandemic.

Canada’s 2020 Fall Economic Statement: Plans for Ongoing COVID-19 Support for Canadian Businesses

The Government of Canada’s 2020 FES highlights an ongoing action plan including proposed measures to continue protecting Canadians’ health, businesses, and jobs in order to maintain strong economic growth and stability. The full 2020 report can be accessed here.

A few of these major planning measures include:

• A new Highly Affected Sectors Credit Availability Program that would provide government funding in low-interest loans for hardest-hit businesses, including those in sectors like tourism and hospitality, hotels, and arts and entertainment.
• A $206 million investment over two years, starting in 2020-21, to the regional development agencies for a new Regional Air Transportation initiative.
• Extending the 25 percent top-up to the Canada Emergency Rent Subsidy until March 13, 2021.
• Extending the Canada Emergency Response Benefit for an additional four weeks.
• Increasing the maximum Canada Emergency Wage Subsidy rate to 75 percent for the period beginning December 20, 2020, and extending this rate until March 13, 2021.

The government is anticipating an additional investment of up to $500 million for RRRF funding to support Canadian businesses, bringing the total funding to over $2 billion. These changes have not yet been announced, but you can stay up to date on the RRRF or  COVID-19 funding news and support through Mentor Works.

To get more expert advice on how to manage your business and taking next steps during COVID-19, read our blog COVID-19 effects & next steps for your global business.

The post How Canada’s Regional Relief and Recovery Fund helps Canadian businesses during COVID-19 appeared first on Trade Ready.

With border closures, reduced consumer spending, and mandatory business shutdowns, the ongoing coronavirus pandemic has hit many businesses hard with Canadian manufacturers being among the hardest hit. The Canadian government has acted by introducing COVID-19 business support programs, as well as changes to current government funding programs.

The CanExport Canadian government funding program was introduced in 2016 to help Canadian exporters enter foreign international markets by mitigating risks through government grants. This program has seen a massive temporary change as a direct result of COVID-19, leading to travel costs no longer being eligible for funding.

Canadian businesses may access up to 75% of costs associated with export marketing projects to a maximum $75,000 per application through CanExport funding.

Businesses can still receive grants for eligible projects such as virtual events, search engine optimization, marketing tools, and market research.

About CanExport Market Development Grants

What is CanExport?

The CanExport program is a popular Canadian government grant that supports businesses as they explore/expand new and under-developed international markets.

As mentioned previously, this program has temporarily suspended grants towards travel or trade show-related projects, but they are continuing to support businesses with non-travel-related eligible activities such as marketing expenses, market research, and virtual events.

How much funding could my business receive through the program?

The full list of eligibility criteria, as well as eligible project costs can be seen below.

If your business is eligible for funding, you may be able to access up to 75% of project costs to a maximum $75,000 in non-repayable funding per project.

The maximum annual CanExport funding per applicant is $99,999 per government fiscal year, which begins April 1 and ends March 31.

CanExport Funding Eligibility Factors

What businesses are eligible for CanExport grants?

The CanExport program has slightly altered their eligibility criteria to be more inclusive with their funding support for businesses that can use this funding:

• Be a for-profit organization;
• Maintain 1 to 500 full-time employees;
• Earn annual revenues ranging from $100,000 to $100,000,000;
• Be incorporated federally or classified as a limited liability partnership (LLP);
• Create eligible project expenses of $20,000 or more; and
• Be financially stable and able to pay all project expenses not covered by the program.

With major changes happening to the CanExport program as COVID-19 evolves, be sure to review most up to date information on CanExport eligibility criteria.

What activities and projects are eligible for CanExport funding?

The CanExport program prioritizes approving projects that they believe will maximize a Canadian business’ exposure and help them find clients in new international markets during COVID-19. This includes activities such as:

• Marketing tools creation, adaptation, and translation;
• Business, tax, and legal advice;
• Participation at virtual trade events and fairs;
• Interpretation services;
• Search engine optimization (SEO);
• IP protection, certification, and adaptation; and
• Market research, feasibility studies, identification of key contacts, and b2b facilitation.

Similarly to the eligible businesses, the eligible activities that can be funding through CanExport have changed, and will continue to change as the pandemic evolves. View the latest eligible projects through CanExport.

How to Apply for CanExport Funding

CanExport funding applications should be submitted at least eight weeks prior to incurring project expenses. Application forms can be accessed online and once completed will be approximately 8-10 pages in length, plus supporting documentation.

Businesses can begin executing a project once the company’s application has received formal approval into the CanExport program and a contribution agreement has been signed. Have more questions? View additional CanExport FAQs, or discuss your business’ eligibility for CanExport funding with a member of Mentor Works.

The post CanExport Funding During COVID-19: Frequently Asked Questions (FAQs) appeared first on Trade Ready.

These are challenging times, to say the least. So much we can’t do, so many places we can’t go to, so many people we can’t see. So many plans curtailed, so many projects on hold.

Yet, believe me, there’s a lot we can do. And how we cope through the crisis and prepare ourselves for whatever’s next is critical. Not just for our businesses today and tomorrow (and therefore our jobs and the economy as a whole) but for our sanity right now.

So let me share with you just ten things you can absolutely do from home to support your international business during the coronavirus crisis, once you’ve dealt with the urgent like staff concerns, orders in-progress, accommodating operations to the new situation, and dealing with tax/legal issues.

1. Take stock of your business

Make the most of this time by evaluating where you are at with your international expansion. Gather data, speak to colleagues (remotely), and get a good picture of the situation.

For example, look at your sales history:

• Can you identify any trends?
• Can you identify any markets that are becoming particularly important that you need to maybe look after in a different way?
• Are any markets dwindling?
• Where are those online sales coming from?
• Are any distributors under-performing?

It is a great time to take a step back, look at data, reach conclusions, design measures and start implementing them.

The beauty of this process is that you’ll spot your data gaps, too. When you take a step back and start questioning your data, you will see what you haven’t been measuring so far and start thinking of ways to do it.

2. Check out your competition

You should always be keeping an eye on what your competitors are doing as part of your own market strategies. But now is a great time for a deep dive.

• What markets are your competitors present in?
• What are they (not) doing?
• How are they communicating?
• What are their routes to market?
• What’s their pricing like?

There’s a lot you can find out online.

This links to the point above: if you are selling less to a certain market and a competitor is pursuing an aggressive or rather clever marketing strategy, are you losing out to them? What market intelligence lies beneath all these marketing moves?

3. Revisit your business strategy

It might seem like a difficult time to plan ahead with the current level of uncertainty, but now is actually a good time to plan a strategy (again, having dealt with the urgent before) for when the crisis is over.

• Any new markets you need to target or at least explore?
• Any distributors that need managing differently?
• Any improvements you can make to your international marketing, financing or logistics? For example, can you use social media more efficiently?
• Can your pricing structure be more export-friendly?
• Shall you consider a new logistics provider or look, for example, at a regional hub/warehouse, a free trade zone, maybe?

Think about what you can do to improve your readiness to trade in target markets. Get your team on-board with some in-depth market research. Consultants can help too, either to guide you in an in-house research project, or to help you get the work done – for example, in markets that are totally new or where language is a barrier.

Consultants can help teams conduct research more efficiently by looking at each individual’s skills and preferences, and then matching market research tasks accordingly. For example, someone in your team may have language abilities you didn’t know about, or might have lived in another country and have some contacts or cultural awareness.

By mapping those skills and passions to what needs to be done, you can put together a three-month home-based project to develop a target market strategy. It’s amazing what can be achieved.

4. Identify potential distributors in overseas markets

This is a great time to do some online research and then get in touch with these potential partners, since you are more likely to find them in front of a monitor now (depending on the sector, obviously).

Needless to say, we need to be tactful. But remember that they need business as much as you do. Just be sensitive and ask if this is a good time to engage, be empathetic, and focus on the positive – if you explain that this is part of your crisis exit strategy, they’ll probably understand.

5. Generate content

Is your company blog looking a bit patchy? Website a bit out of date? This might be the time to produce content (blog posts, case studies, press releases) that can be used throughout the whole year.

With a client, my colleagues and I are looking at datasheets and installation instructions now, making sure everything is up-to-date, consistent and correct. We’ve never before had time for such a thorough exercise. With another client we are starting to write articles for a blog that we will launch later in the year. You can also work on press releases.

We’ve seen journalists on Twitter desperately seeking positive, non-virus related content, so you’ll have their attention!

If you have the budget, try engaging others too, like translators, designers, and copywriters to help make your content valuable to your audience. A lot of these creative professionals are self-employed and need the work now. They can do things faster, better, and free you up to focus on what you do best. You can test different vendors and start putting together a great team for years to come!

6. Audit your marketing efforts

When did you last look at your marketing materials for overseas markets? You can do a small audit now and identify areas for improvement, then get started working on it or at least plan for when things go back to normal.

Want to learn more about how to plan and implement marketing strategies that will attract new customers?

Evaluate your marketing efforts:

• Who is engaging with your social media globally?
• What are you doing about it?
• Are there any translations you should be commissioning?
• Any videos that need subtitling in another language?
• Any manuals that could be simplified to make them more export-friendly?

Start with something very simple and go step-by-step. No need to feel overwhelmed. It’s the same as if you were sorting your pantry at home, or your fridge. Grab a piece of paper or open a Word file and write down everything you do for your export marketing – everything.

Ask your team. Work out what you do, why you do it, how often, when was the last time action was taken, who is responsible for what. Just that. Then leave it. Go back to it a few days later. Anything you see that can be done better, added or deleted?

What is extremely important is that this is done in conjunction with revising, or at least understanding, your international business strategy and marketing plan.

For example,

You won’t know if you need Twitter in Spanish unless you understand what you are trying to do about Spanish-speaking markets.

A blog is only useful if your marketing plan indicates it. Your content plan and how you promote it also need to have some well-researched rationale behind them.

7. Connect with your clients

I asked a client recently if we can do a video call to catch up with the export team spread around the world. We communicate daily by email and we have the odd video call normally, but we don’t usually do team-wide calls. I am convinced we need to see each other now more than ever, since we are spending so much time secluded.

We all know that so much communication is non-verbal. Even if you look tired, go for it, you’ll certainly gain my sympathy. I want to see the mess on your desk and hear your kids around. I want to see that picture frame and that plant you love so much. I want to see that you and I are in this together and that we can have a laugh (or a cry). This will be over one day, but we’ll never forget the personal connection from that video call. It’s human nature.

8. Team building

Similarly, this can be a great time to video call your local partners, such as distributors. They will be available, anxious and keen to feel supported. You can just ask how they are, how they are coping, what the street around them looks like. What’s the toilet paper situation? (you laughed? so will they!) Anything you can do for them? Any tips you can share? Stay positive, too, think about what you’re going to do together when this is all over.

Keeping in touch with suppliers (including freight forwarders, customs brokers, translators, consultants, designers, for example) will be hugely valued. Remember that many are either self-employed or working in very small companies and they might be struggling.

9. Ecommerce & delivery

Can you beef up your ecommerce capabilities? If you deliver services, can you deliver more online?

Trade missions, market visits and trade shows are three key services we deliver for clients in Latin America and, even as a microbusiness, we are quickly adapting to deliver all of them online. So can you!

10. Training and capacity building

This might be the time for your team to get some valuable training and upskilling. Identify what capacities you need to build in-house and find online providers, some of whom can deliver bespoke training in the form of webinars or other virtual media.

This is the time to assess your own professional development, too, and identify any relevant gaps. Then you can find online courses, webinars and blogs to learn more. And remember to share your knowledge, too!

As you can see there is a lot to do. So sit down and work out a plan first – you can’t do it all – and the last thing you need is to add stress to yourself and burden your team.

Make sure that whatever you plan is manageable, realistic, and positive. However much or however little you can do under the circumstances is great.

Putting into practice any of the above will keep you busy, motivated, and talking to people. Beyond business results, we all need a bit of that right now, don’t you think?

From a business perspective, and global economic perspective, we are dealing with unprecedented and unpredictable times. It has never been more crucial to ensure we are all staying informed through credible sources. FITT has collected COVID-19 global business resources from world-leading organizations collected in one place. 

The post 10 things you can do from home to boost your export business appeared first on Trade Ready.

It’s simple really. This is a very difficult, confusing, and stressful time for everyone, not least of which business owners. To get some answers on the tough issues businesses of all shapes and sizes are facing right now, we assembled a team of experts to provide advice and resources on Twitter. Read the highlights below and follow the links for more information.

Stay safe and healthy. We’re all in this together.

Topics covered:

• What are the biggest challenges your business is facing today?
• What can businesses do today, in the middle of this crisis, to mitigate the effects of COVID-19 on their company?
• Cashflow and payment risk are major issues for most businesses right now. How can businesses reduce this risk and get access to $ they need now?
• What kind of conversations do we need to have with our vendors, 3PL, customers, accountants, lawyers right now?
• What are some global resources businesses can tap into to manage this level of disruption?
• How can businesses prepare now for the next 6 months to a year? What have we not thought of yet?
• Are there any positives coming out of this today? What about looking ahead to the future?

Panelists:

Audrey Ross, CITP (@TresAudrey) Logistics & Customs Specialist at Orchard International Inc., based in Toronto, Canada
Sarah Barnes, (@BeVictoryus) CITP Director at Victoryus Inc, and host of Let’s Talk Supply Chain podcast, based in Mississauga, Canada
Bernadette Fernandes (@on_the_varanda) Founder & CEO of the Varanda Network, based in Saint John, NB, Canada
Emiliano Introcaso, CITP (@Introcaso) Export Advisor at Export Development Canada (EDC), based in Toronto, Canada
Cathy Morrow Roberson (@CMRoberson06) Founder and Head Analyst Logistics Trends & Insights LLC, based in Atlanta, USA
Mark Agnew (@Mark_Agnew) Senior Director of International Policy at the Canadian Chamber of Commerce, based in Ottawa, Canada
Irina Rosca (@sustainSCM), Director of Supply Chain and Customer Success at Helix, based in San Diego, CA

Why don’t we start by getting it all out on the table.
What are the biggest challenges your business is facing today?

A1- We are in healthcare so our biggest challenge is being part of the answer and response with limited resources. #TradeElite

— Irina Rosca (@sustain_SCM) March 26, 2020

#TradeElite A1 the uncertainty is a big thing on everyone’s mind. How do you plan? where do double down? a lot of questions with minimal answers available #SmallBiz

— Sarah Barnes-Humphrey, SC media personality (@bevictoryus) March 26, 2020

This could be quite a list…safety of employees, business continuity, cash flow, maintaining sales yet meeting drastically shifting consumer expectations??? #TradeElite #COVID19 #globalbiz

— Scott C. Ferris (@ScottCFerrisPEI) March 26, 2020

#TradeElite A1 When will it end is a question I’m getting

— Cathy Roberson (@cmroberson06) March 26, 2020

A1. unprecedented change and not knowing where to start, what is credible, where to focus, what are the priorities, feeling behind the 8-ball, hard to be proactive when you’re in the thick of it, and alot of information coming at you at once from everywhere. #TradeElite #COVID19 https://t.co/HEtpsSnq2Z

— bernadette fernandes (@on_the_varanda) March 26, 2020

A1 #TradeElite for exporters what we are hearing is that cashflow is a constrain. The Canadian Government has joined forces with @ExportDevCanada & @bdc_ca to bring solutions to exporters (and #SMEs) to help solve this issue through financial solutions that can help your ops. https://t.co/e9dwx2ZBRz

— Emiliano Introcaso CITP PLog MBA (@introcaso) March 26, 2020

#TradeElite A1 protect your team, customers and community first; then do a business stress test.

— Caroline Tompkins (@carolineFITT) March 26, 2020

A1. Air cost & capacity issues, warehouse closures, uncertainty around when businesses are closing and when they think they will be back to full operations. #TradeElite

— audrey ross citp|fibp (@tresAudrey) March 26, 2020

A1. In my interaction with #Indian exporters out here the biggest challenge is ‘what lies ahead’? Are the products they’ve been exporting all these years going to even be accepted once the dust settles. Are consumers going to look for new products. #TradeElite

— Varun Anthony (@Varunanthony) March 26, 2020

Hi! A1: These days it’s all #COVID19 all the time. #cdnbiz are scrambling to grapple with what it means for them and what are the implications for their supply chains. Key issues include medical equipment, air cargo, and the Flag of CanadaFlag of United States border. #tradeElite

— Mark Agnew (@mark_agnew) March 26, 2020

I’m hearing lots of big challenges right now:
Uncertainty
Cashflow
Costs
Safety
Let’s move on to some solutions #TradeElite

— FITT (@FITTNews) March 26, 2020

What can businesses do today, in the middle of this crisis, to mitigate the effects of COVID-19 on their company?

#TradeElite A2 Communicate regularly with employees, customers and supply chain partners.

— Cathy Roberson (@cmroberson06) March 26, 2020

A2 #TradeElite My first suggestion to a business is to know they are not alone. Many organizations such as @CdnChamberofCom have created resources that can provide guidance on what’s going on with #COVID19 and how business can prepare 1/2 https://t.co/SzJmyMXkNi

— Emiliano Introcaso CITP PLog MBA (@introcaso) March 26, 2020

A2. My heart goes out to the SMEs all across the globe. The businesses who have just begin to take steps into international markets. However this is the time when SMEs & even the larger cos. should closely monitor the trends occurring across potential markets (1) #TradeElite

— Varun Anthony (@Varunanthony) March 26, 2020

A2. Today: think about people 1st: yourself, your team, clients, families, community (not necessarily in that order) and immediately put measures in place to protect everyone; start now! Essential & Response services only
Tomorrow: plan for today#BizIsolate #TradeElite #COVID19

— bernadette fernandes (@on_the_varanda) March 26, 2020

A2 I agree with @cmroberson06 that Communication is key, I would add focusing on the wellness of your teams is necessary, empathy in our back pockets & looking at a new way forward through #innovation #TradeElite

— Sarah Barnes-Humphrey, SC media personality (@bevictoryus) March 26, 2020

A2. Really understand what you have underway, communicate with your customers. Obvi it’s not biz as usual but letting them know that their projects are underway, deliverable (either now or on pause for later). Stay positive. #TradeElite

— audrey ross citp|fibp (@tresAudrey) March 26, 2020

A2: First and foremost, follow directions of all Federal & Provincial officials. Then assess impacts to your biz & realize where/if you can change. Seeing lots of creativity – home delivery, caremongering in communities, companies shifting to produce needed supplies #TradeElite

— Scott C. Ferris (@ScottCFerrisPEI) March 26, 2020

A2: It is absolutely critical to understand your supply chain. The rollout of “essential services” measures and border restrictions around the? are straining the movement of goods. Thinking holistically about the enablers for you and your logistic providers #TradeElite

— Mark Agnew (@mark_agnew) March 26, 2020

A2. Surveying what is essential. We send a lot of samples & we see couriers are going to add surcharges starting April 1st… so being careful with what samples are needed & what can be rendered or shown in a video. #TradeElite

— audrey ross citp|fibp (@tresAudrey) March 26, 2020

Lots of great advice from our panel for companies out there.
Right now you can:
Take care of/support your team
Communicate with your stakeholders
Understand your complete supply chain
Tap into government resources
Take time to adapt and self-care#COVID19 #TradeElite

— FITT (@FITTNews) March 26, 2020

Cashflow and payment risk are major issues for most businesses right now. How can businesses reduce this risk and get access to $ they need now?

A3: Talk to every one of your lenders. Chances are they have been directed to ease terms, offer more flexible timeframes etc. Seeing this from student loans to even CRA tax time. #TradeElite #COVID19

— Scott C. Ferris (@ScottCFerrisPEI) March 26, 2020

A3: Leverage federal gov’t (and provincial/state) programs for cashflow NOW (NGEN funding 100% of #COVID19-response); Plan your sales pipeline during downtime/slowdown for cashflow LATER; Lean on @ExportDevCanada to mitigate payment risk ALWAYS. Expect the unexpected #TradeElite https://t.co/xNEsY2Vbsi

— bernadette fernandes (@on_the_varanda) March 26, 2020

A3 #TradeElite more than ever companies need to know how much (and for how long) are they going to be in the red. Communication with your commercial bank is key, and they know we are in this together, and they will help you. If you are a #SME currently going through some… 1/2 https://t.co/Da8dOZz9nJ

— Emiliano Introcaso CITP PLog MBA (@introcaso) March 26, 2020

A3: #cdnbiz shd understand their contracts and potential pain points. Be proactive in watching how rapidly evolving gov’t policy announcements will impact you. Spend time looking at @CanadaTrade @ExportDevCanada resources. @Ailish_Campbell‘s team is keen to help biz. #TradeElite

— Mark Agnew (@mark_agnew) March 26, 2020

#TradeElite A3 There are also a growing number of solutions from logistics providers to help finance cargo. For example, Flexport offers such a solution.

— Cathy Roberson (@cmroberson06) March 26, 2020

A3 2/2 #TradeElite cashflow issues, so prepare a plan, find out what you need. If you want to ensure you covered all of your basis, use @FITTNews ? https://t.co/ccSBQIDOd3 – Cash Flow Management unit. Download it here ??

— Emiliano Introcaso CITP PLog MBA (@introcaso) March 26, 2020

What kind of conversations do we need to have with our vendors, 3PL, customers, accountants, lawyers right now?

A4 #TradeElite find out what kind of service support are they offering during #COVID19. All businesses have been very proactive and supporting in any way of form. https://t.co/kydtyw92Rj

— Emiliano Introcaso CITP PLog MBA (@introcaso) March 26, 2020

A4. Dear Vendor, now’s not the time for you to sell us anything but #essentialservices or things that makes things easier. Dear Customer: please support your local SMEs now and later. Dear Everyone Else: we need your expertise/guidance and your deferred invoicing #TradeElite https://t.co/6Sv5vMsPWU

— bernadette fernandes (@on_the_varanda) March 26, 2020

A4: Make sure your supply chain and enablers are open! Companies are taking different interpretations of “essential business” and some companies have had a surprise to learn that their partners have decided (or are required) to shut down. #TradeElite

— Mark Agnew (@mark_agnew) March 26, 2020

A4: With every touchpoint of your biz connect with them. Tell them what’s happening, what you are doing. Ask them how they are doing. Work on solutions to keep the biz flowing. They need you as much as you need them. Can’t say enough – we are in this together. #TradeElite

— Scott C. Ferris (@ScottCFerrisPEI) March 26, 2020

A4 Communicate, Communicate, Communicate and find ways to collaborate in new ways #TradeElite

— Sarah Barnes-Humphrey, SC media personality (@bevictoryus) March 26, 2020

What are some global resources businesses can tap into to manage this level of disruption?

A5 ok… this is going to be a ? see below some of the resources that are specific for ?? companies https://t.co/uyEDJyGFqC

— Emiliano Introcaso CITP PLog MBA (@introcaso) March 26, 2020

A5: What they said RT: @FITTNews – #COVID19 global resources from world-leading organizations collected in one place – that businesses can tap into https://t.co/AfC1zpOais. I LOVE @TCS_SDC because they know my #Canadian business, my customers, in their markets #TradeElite https://t.co/yPkOOOi87P

— bernadette fernandes (@on_the_varanda) March 26, 2020

A5: Social Media. Get your story out there is you are an SME. Tell it like it is, if you can keep going, tell your customers you’re there for them. Pivot if you can, but use social tools to build your biz. Here’s what my accountant is up to for example https://t.co/A0AOmzqmqm

— Scott C. Ferris (@ScottCFerrisPEI) March 26, 2020

A5: the resources that FITT has available online are top-notch for #cdnbiz to get a digestible but substantive take on issues affecting them. @CdnChamberofCom will be launching a dedicated micro-site next week with lots of resources. Watch our Twitter handle for more info!

— Mark Agnew (@mark_agnew) March 26, 2020

#TradeElite A5- best resources to use are #partners. Communicate with your partners, customers, vendors and professional colleagues, this is a great time to share #knowledge and learn.

— Irina Rosca (@sustain_SCM) March 26, 2020

A5. As a former Trade Commissioner myself I would always say the biggest trade resource that any #Canadian company has at the moment in their international markets in @TCS_SDC Reach out to all federal, provincial and crown teams across the markets you are present in #TradeElite

— Varun Anthony (@Varunanthony) March 26, 2020

A5 Lots of great resources out there, webinars, podcasts and blogs full of thought leadership on the subject, you can find some of it here: https://t.co/7JvtuW6pPu #TradeElite

— Sarah Barnes-Humphrey, SC media personality (@bevictoryus) March 26, 2020

#TradeElite A5 Service updates from logistics & transportation providers. @Agility publishes a great one – https://t.co/IpsKd0PY0h

— Cathy Roberson (@cmroberson06) March 26, 2020

How can businesses prepare now for the next 6 months to a year? What have we not thought of yet?

A7: 1/2 #TradeElite Most biz will never be done the same again. Ever. If you changed because of #covid19Canada you may not be able to go back to old ways. Probably a good thing for many. Change is often hard but brings progress. Look at impact this had on global pollution.

— Scott C. Ferris (@ScottCFerrisPEI) March 26, 2020

A7: 2/2 #TradeElite Be prepared to do lots of reading on global lessons learned. Listen to what your customers/suppliers tell you they learned or how they responded. Most importantly be ready to get back at it – stay in touch with employees. You’ll need to bring them back & fast!

— Scott C. Ferris (@ScottCFerrisPEI) March 26, 2020

A7 prepare a plan of action for innovation. document and learn as much as you can while going through this, what worked, what didnt, what could have been done better #TradeElite

— Sarah Barnes-Humphrey, SC media personality (@bevictoryus) March 26, 2020

A7: NOW is the time to adapt quickly and mitigate #COVID19-response! When this is over, then is the time to prepare for #BusinessContinuity #DisasterRecovery – is that still a thing? #TradeElite https://t.co/JY1b9YeUAO

— bernadette fernandes (@on_the_varanda) March 26, 2020

A7 (well A6 ?) #TradeElite consider getting informed. If you are not part of a chamber or association, I think this is the time to consider. Look at national, provincial or local associations and chambers such as @CdnChamberofCom @cme_mec @OakvilleChamber @TorontoRBOT https://t.co/wZTEjQFOPH

— Emiliano Introcaso CITP PLog MBA (@introcaso) March 26, 2020

Let’s look on the bright side to end today’s chat!
What, if any, are the silver linings with this crisis? Are there any positives coming out of this today? What about looking ahead to the future?

A8: There are always silver linings. With #COVID19 it’s more community-building, new words like #caremongering, less meetings, more resourcefulness… and #ClimateChange… our Earth is healing <3 #TradeElite https://t.co/gyeLpfMIzF

— bernadette fernandes (@on_the_varanda) March 26, 2020

A8 #TradeElite this is a great question @FITTNews Businesses have learned how preparedness is important and how changes can be good for both sides. How they can adapt to a situation, etc https://t.co/hcAiN5Uynj

— Emiliano Introcaso CITP PLog MBA (@introcaso) March 26, 2020

A8: #TradeElite So many creative ways to do biz have emerged. Global pollution dropped. Industries will adapt (cruise lines esp.)I’m hoping we are realizing how connected we all truly are to one another and that we all have impacts that are far-reaching.

— Scott C. Ferris (@ScottCFerrisPEI) March 26, 2020

A8. We have learned that it has to be people first. If your company “can’t afford” sick leave, fair wages, safety / protective gear, you need to re-think your biz strategy. #TradeElite

— audrey ross citp|fibp (@tresAudrey) March 26, 2020

I think that we all saw how a few weeks of everyone stopping, can have a significant effect in our environment, so maybe this might mean that more #cleantech companies might help solve some issues in the future #TradeElite – I am sure @lynncote can add here!

— Emiliano Introcaso CITP PLog MBA (@introcaso) March 26, 2020

A8 Tough one. @CdnChamberofCom hears every day about the difficult choices #cdnbiz are making right now b/c #COVID19. Use this as a chance to re-evaluate your 3PL, supply chain inputs and brush-up on the resources that are out there. Good luck and stay healthy. #TradeElite

— Mark Agnew (@mark_agnew) March 26, 2020

Read the rest of the chat and join future discussions by following the #TradeElite hashtag. And stay tuned for the next #TradeElite chat, coming up Thursday, April 16 at 2:00-3:00PM ET, and if you haven’t yet, join us on Twitter at @FITTNews.

The post COVID-19 effects & next steps for your global business: experts weigh in on Twitter appeared first on Trade Ready.

COVID-19 is continuing to influence international trade. The supply chains of small and medium-sized enterprises (SMEs) are facing all kinds of disruption due to the current fast-moving situation.

The reality is that many SMEs are struggling to continue their businesses, an element of which has been conflicts or disputes with their suppliers.

Here’s why, and here’s what you can do.

• Which SMEs characteristics make them more vulnerable in COVID-19 situation?
• Which probable problems will SMEs encounter in the next months due to COVID-19?
• What are the common mistakes of SMEs in drafting a purchase and sales contract?
• What are the short-term measures that SMEs can take to reduce disputes and problems with their international suppliers?

Characteristics of SMEs

SMEs’ have characteristics that make them more vulnerable  to encountering problems with their suppliers than large enterprises. Why?

Because, in general, SMEs:

• Are not critical customers of suppliers, and there are many of them
• Do not purchase a large portion of a supplier’s total output
• Purchases are not a significant portion of a supplier’s annual revenues
• Are not agile enough to switch to another product or supplier quickly
• Cannot take swift legal actions against suppliers
• Cannot be protected individually by governments in international trade disputes

Common problems SMEs are facing

As mentioned above, most SMEs are not the first priority of suppliers in difficult situations. Furthermore, they might not have a suitable contract to protect themselves. Therefore, suppliers may decide to deprioritize some SMEs or even become delinquent.

In the current situation, many suppliers are shutdown, working at lower capacity, encountering internal finance problems, or experiencing other issues with production and operations.

This may force them to:

1. Fail to deliver or cancel some orders
2. Delay orders
3. Partial delivery
4. Decrease the quality of the goods in different methods
5. Increase the price or change the currency of the transaction
6. Change the terms and method of payment to safer methods for themselves
7. Decrease the packaging quality
8. Change the delivery conditions
9. Change the country of origin or place of departure
10. Announce bankruptcy or insolvency

Due to a variety of factors such as low expertise, bargaining power, or financing capabilities, SMEs might not write and sign professional contracts in their international activities.

Common mistakes cause losses and increase their vulnerability. Identifying the errors can help to avoid them in future cooperation contracts and mitigate their adverse effects in the current situation.

Here are some common mistakes and related solutions during the current world health crisis:

1. Problem: Not having a written contract

Some companies prefer to cooperate solely based on trust and do not write a detailed, comprehensive contract.

Trust is good, but not enough. The contract is will work when trust has failed.

The details of the business relationship should be written and signed by authorized officers of all parties. A purchase order, proforma invoice, quotation, and other instruments are not usually capable of covering all crucial details.

It is undeniable that when you do not write a contract, you are silent about most aspects of your business relationship, and details of the business will be ambiguous. Therefore, they will be up for interpretation and construction.  Never exit a successful meeting without a written text. It is crucial to write down what you have agreed to.

One clear written sentence is more valuable than ten pages of explanation in a petition to the court or arbitration centre.

Some companies that do not have a written contract are now struggling with their suppliers due to the effects of COVID-19, such as delays and non-delivery. Some businesses don’t even know which mechanism should be used to settle the disputes because they have not been specified in the details of an agreement.

Solutions:

If you are experiencing conflicts in a business relationship without a contract, finding the best operational solution depends on many factors, including:

• Type of conflict (number 1 to 10 mentioned above)
• Method of payment (open account, advance payment, documentary credit, etc.)
• The importance of continuing the business relationship for the parties, and level of trust
• Incoterms rule used
• Level of ambiguity in current business settings between the parties
• The importance of timely delivery of the product in the supply chain
• Ability to quickly find a substitute supplier
• Previous customary procedures between parties

Learn how to Ensure your company adheres to legal and ethical best practices as you discover what proactive and reactive measures you should take.

If you are experiencing conflicts with your supplier and you do not have a written contract, try to solve your problems via amicable solutions. In the meantime, consult with an experienced international trade lawyer to avoid more mistakes, analyze the above factors, and decide on your next steps based on international trade rules, your previous agreements, business settings, and your bargaining power.

All of your emails, phone calls, communications, and typical business actions matter in this type of situation.

So, analyze and confirm your decisions with experts before actioning them.  You need to be aware of the positive and/or negative effects of your messages. Keep an archive of all your correspondence and your partner’s acknowledgment of their receipt. Instead of phone calls, send emails or mail communications to the formal contact channels or the legal and registered domicile of your partner. Send emails to official business addresses under your partner’s formal website domain to ensure that the message arrived in the right place.

Giving proper notices at the right time and with the correct media is vital. You might need to analyze this situation and craft your messaging to partners with a multi-skill team, including commercial and legal experts. The following subjects should be the most critical priorities in your analyses:

• Global presence of your partner (the countries that your partner has a type of property)
• Governing law
• Dispute settlement
• Force majeure
• Termination
• Consequences of termination
• Terms of payment
• Delivery and Incoterms rule
• Price and currency
• Specifications of the goods
• Usual time of delivery

You should also consider several possible scenarios of how to proceed to resolve the challenge and do a full analysis of the pros and cons of each option.

2. Problem: Inaccurate description of goods

Parties do not usually describe the goods with as much detail as needed. The essential details that should be indicated in the contract of different products are not all the same. Buyers should define the exact details of the goods in an article or an attachment to the contract. Some companies may use qualitative expressions such as “standard, first-class, suitable, in a good state,” or others to describe goods.

Avoid using imprecise phrases and instead define each quality using measurable criteria.

You must decide which of the following items should be utilized for your particular product:

• HS code
• Packaging type
• Material
• Marking and labelling
• Weight
• Size
• Exact quantity of goods shipped
• Country of origin
• Product code
• Product analysis
• Standard type
• Year of production or crop year
• Performance
• Guaranteed figures

Solutions:

If you have not precisely defined the specifications of the goods in your contract, refer to your previous cargoes and send approved documents and notices to your partner to remind them of the quality standards.

You may also decide to employ an independent testing or inspection agency to evaluate the goods before shipment. For a list of credible companies, you can check  https://www.tic-council.org/.

3. Problem: Writing ambiguous obligations

A common problem in international contracts is writing commitments without sufficient clarity. When writing outstanding obligations, you should define these aspects of the duties:

• When should the obligation be fulfilled?
• What are the consequences of a delay?
• What are the consequences of non-performance (the obligation has not been met)?

Because the contract is written in good faith and an amicable situation, the parties usually do not clarify the above issues in the contract. SMEs are more vulnerable and should be more cautious with this subject. Imagine that an SME has ordered some products and paid a 15% advance payment. The balance should be paid within 90 days, and the delivery term is “FOB a port in departure”. Now, can anyone answer the following questions?

• When should the product be delivered?
• What if the seller delivers the product with delay?
• What happens if the seller does not deliver the product? What about the 15% advance payment?
• When should the 85% balance be paid? Ninety days is the period, but when is the commencement date of that period?
• What happens if the shipping company delays in getting delivery of the cargo?

Solutions:

Have your contracts investigated by a professional multi-skill team including a lawyer, a logistics expert, technicians, and a financial expert, and check for the aspects that need clarity.

Inform your supplier and redefine your agreements in writing. You might need to add an addendum or amendment to your contract. At least try to redefine and add transparency to the material conditions of your contract. These modifications should be in writing and signed by authorized officers of all parties.

Send some notices to your partner on letterhead to remind them of your customary and reasonable actions in previous transactions.

In case you agree to waive a default in the current situation, make it clear that this waiver will apply solely to that particular default and will not be a continuing waiver, nor will it excuse any later defaults.

If you are going to pay or have paid a considerable amount as an advance payment, and the product will not be delivered for a long time, you should request a receipt for the advance payment as proof it has been accepted by the partner. You might also need to ask your partner to provide you with a standby letter of credit or advance payment bank guarantee.

4. Problem: Writing conflicting conditions

You can find this problem in many contracts. This is usually because the contract text has been drafted by one individual who cannot analyze all four aspects (technical, financial, legal, and commercial) of an international business contract. Look at the following condition as an example:

• The delivery is on the base of “FOB port”
• The seller will deliver full set clean on board B/L, indicating freight prepaid

If the terms of delivery are on the base of FOB, the freight condition in B/L shall be “collect” and not “prepaid.” This is a conflicting condition and may cause disputes and require interpretation.

Solutions:

If you identify that your contract contains conflicting conditions, have it investigated by a professional multi-skill team.

To prevent major issues, write to your partner to solve the conflicting conditions quickly and prevent future problems. First, try to solve this type of problem through amicable communication. Write to your supplier and redefine your agreements in writing. You might need to add an addendum or amendment to your contract. At least try to redefine and add transparency to the material conditions of your contract.

Send proper notices to your partner on your letterhead to remind them of your customary course of action in previous transactions.

5. Problem: Unsuitable governing law and dispute settlement method

Try to select the rules of a third party country as the governing law. When you select the rules of your partner’s country, the possibility of fair settlement will decrease. You should also consult with local lawyers to investigate the effects of governing law on your contract. The next point is selecting the dispute settlement mechanism. Arbitration is one of the best methods for solving international commercial disputes.

Learn how to ensure your success in new markets by conducting proper research, selecting the most effective entry strategy and implementing it efficiently.

Solutions:

Consult with a professional law firm or expert to analyze this subject for the worst-case scenarios.

For future contracts, try to select the rules of a neutral state. Furthermore, the text of arbitration clause should at least include the following items:

• Scope of arbitration
• Type of arbitration
• Number of arbitrators
• Proceedings of arbitration
• Venue
• Costs
• Severability of the arbitration clause

What are the short-term measures that SMEs can take to reduce disputes and problems with their international suppliers?

• Avoid legal actions as the first step.
• Try to solve disputes via amicable or expert team negotiations.
• Make a written archive and write and sign all new agreements and modifications to your contract with your partner.
• Employ an independent testing or inspection agency to check the quantity, quality, and/or packaging of goods before shipment.
• After consultation with experienced lawyers, send official and informative notices to your partners regarding your agreements, expectations, and consequences for breach of conditions. In this step, avoid using aggressive and offensive tones.
• In case the price was fixed in your contract, do not accept the changes in price and consult with your legal team or law firm about “hardship” and/or “price revision conditions”.
• If you received a Force majeure notice or statement, immediately consult with your legal team or law firm. Judicial courts or arbitration centres do not accept some statements.
• Inform your supplier immediately if you face new rules, regulations, and restrictions in your national trade system.
• Study the standard international rules mentioned in your contract and analyze their effects on your agreement. Incoterms, UCP600, URDG758, URC522 are some samples.
• Look for new suppliers in case you are experiencing severe issues with your current supplier, but try your best to have a comprehensive, clearly written contract before starting your new relationship.
• Beware of scam suppliers on the net or on some B2B websites. If you find sources on the internet, verify their credit before engaging with them. It’s a good time for phishing.

From a business perspective, and global economic perspective, we are dealing with unprecedented and unpredictable times. It has never been more crucial to ensure we are all staying informed through credible sources. FITT has collected COVID-19 global business resources from world-leading organizations collected in one place. 

The post The 5 most common mistakes SMEs make in drafting purchase and sales contracts + solutions for SMEs during the COVID-19 crisis appeared first on Trade Ready.

To all valued members of the FITT community,

The coronavirus outbreak is being felt globally and is a serious concern for everyone. It is important that we all take the necessary steps to protect the health and safety of our families and our communities.

Last week at FITT we joined the many organizations adjusting to a work-from-home environment in order to protect our staff, clients, and “flatten the curve” by playing our part in reducing the impact of COVID-19 on our global community. This was our first step.

The second step is looking to the future. From a business perspective, and global economic perspective, we are dealing with unprecedented and unpredictable times.

And whether we are working from home or from our “home offices,” the FITT team is committed to leveraging our network of international trade experts to help each other meet the unique challenges of today and tomorrow and how COVID-19 will affect business continuity.

How can FITT help you?

A crucial activity in this initiative is to ensure we are all staying informed through credible sources. This is the role the FITT team is taking part in – providing as much relevant and actionable information as we can to support trade practitioners and the international businesses we serve.

We are looking especially at the economic impact, and being prepared to navigate risks today so that we are prepared for the future, however that may look.

Valuable resources from FITT

Please follow the links below for a collection of valuable resources. Check back often, as we will continue to add information as we receive it.
FITTforTrade.com/COVID19-Resources
TradeReady.ca/COVID19-Resources

If there are resources or information you are seeking, please let us know how we can help you navigate COVID-19.

Wishing you health and safety,

Caroline Tompkins, CAE, CITP
President & CEO
Forum for International Trade Training (FITT)

The post COVID-19 update from FITT President & CEO appeared first on Trade Ready.